WASHINGTON — Retail sales continued to decline in April, falling for the second consecutive month.
Sales at specialty stores in April decreased a seasonally adjusted 0.5 percent compared with March, while department store sales declined 0.2 percent, the Commerce Department reported Wednesday.
Compared with a year earlier, specialty store sales declined 6.5 percent to $17.3 billion. Department store sales dropped 6.1 percent to $15.9 billion.
Sales for specialty stores and department stores also fell in month-to-month comparisons in March after showing some resiliency in January and February.
All retail and food service providers reported a seasonally adjusted decline of 0.4 percent in April compared with the previous month. Compared with a year earlier, sales fell 10.1 percent to $337.7 billion.
The retail sales change for March compared with February was revised downward to a decline of 1.3 percent from a previously reported drop of 1.2 percent.
“The consumer today does not have the confidence in the economy that is going to allow [her] to go out and start purchasing….It’s playing out in the Commerce Department numbers as well as the results from many different retailers,” said Bob Duffy, senior managing director with FTI Consulting and leader of its retail practice. “Continued concern with the economy drives them away from luxury goods and discretionary items, people want to buy staples.”
The decline in March and downward revision for February put a damper on recent restrained optimism about the direction of consumer spending and were among the leading causes of widespread losses in the equity markets Wednesday. Coupled with weaker sales and continued quarterly losses from the likes of Macy’s Inc. and Liz Claiborne Inc., investors lined up to sell.
The S&P Retail Index fell 3.3 percent, or 10.61 points, to 314.28, as the Dow Jones Industrial Average slid 2.2 percent, or 184.22 points, to 8,284.89.
Shares of Claiborne fell 26.2 percent to $4.26 and Macy’s dropped 6.7 percent to $11.52. Also losing ground were The Bon-Ton Stores Inc., down 18.8 percent to $3.28; Zale Corp., 14.7 percent to $3.29; American Apparel Inc., 13 percent to $4.81; Saks Inc., 11.9 percent to $3.48; Pacific Sunwear Of California Inc., 11.4 percent to $3.65 and Guess Inc., 8.1 percent to $22.05.
Bucking the trend was The Men’s Wearhouse Inc., which jumped 8.2 percent to $16.60 despite no apparent developments at the company.
The government’s retail sales report gives a broader indication of the health of the retail industry than the same-store sales reports released by most major companies. April same-store sales results announced last week were not as dismal as anticipated, but did not give retailers cause for celebration. Discount retailers and alternative channels like dollar stores, in general, have weathered the decline in consumer consumption better than high-end retailers.
“A depressed labor market and lack of consumer confidence continues to play a role in what people buy and how much they spend,” said Rosalind Wells, chief economist for the National Retail Federation. “Noticeable changes in consumer spending will take some time as the economy continues to rebuild itself through the rest of the year.”
Apparel sales fell despite the Easter holiday in April, which is traditionally expected to fuel some apparel and gift sales.
“The bottom line is that consumer spending continues to decline, although not at the precipitous pace of the last half of 2008. Virtually every industry had falling retail sales receipts in April,” said Charles McMillion, president and chief economist, MBG Information Services.